Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
94% of illegal short selling done by foreign investors
Lee Yoon-su, director of the Capital Market Bureau at the Financial Services Commission (FSC), speaks during a press conference about the financial regulator's strengthened measures on illegal short-selling practices at the Government Complex in central Seoul, July 28. Yonhap
By Anna J. Park
By Anna J. Park
Foreign investors account for about 94 percent of illegal short selling cases caught by financial authorities over the past 12 years.
According to Financial Supervisory Service (FSS) data submitted to Rep. Lee Jung-mun of the main opposition Democratic Party of Korea, 93.7 percent of 127 people who have been sanctioned by the financial authorities since 2010 turned out to be foreign investors.
“Considering that foreign investors accounted for 67.9 percent of cumulative short selling transactions over the past five years, the fact that they account for more than 93 percent of those who were sanctioned due to illegal short selling practices shows that the local financial authorities have been passive in curbing wrongful short selling practices on the part of foreign investors,” the lawmaker said.
Despite the passage of a revision to Korea's Capital Markets Act that strengthened punitive measures on illegal short selling practices, calls are growing for the stricter application of the law against foreign investors.
Only 82 cases of illegal short selling have been caught over the last five years, involving both local and foreign investors. Most of the sanctions imposed upon those caught for illegal short selling practices have been penalties of moderately small amounts. On average, the sanctioned investors paid about 163 million won ($125,000).
President Yoon Suk-yeol vowed late last month to take stricter measures to eradicate wrongful acts of short selling. Following the president's direction, the Financial Services Commission (FSC), the FSS, the Korea Exchange (KRX) and the Supreme Prosecutors' Office announced a set of strengthened measures to crack down on illegal short selling practices, including more thorough investigation and monitoring.